U.S. intensifies criticism of Israel on settlement plan

WASHINGTON (Reuters) - The United States on Monday ratcheted up criticism of Israel over plans to expand Jewish settlement building on occupied land, urging it to reconsider despite Prime Minister Benjamin Netanyahu's refusal to back down.

The Obama administration's tougher-than-usual words for close ally Israel came after five European governments summoned Israeli ambassadors in their capitals to express concern over the new settlement projects. But Washington stopped short of threatening any concrete measures against the Jewish state.

The White House and State Department said Israeli settlement expansion in East Jerusalem and the occupied West Bank, including expedited planning in the politically sensitive "E1" zone, ran counter to long-standing U.S. policy and hindered peace efforts with the Palestinians.

It was a marked shift in tone after a recent display of close cooperation - including U.S. backing for Israel in last month's Gaza crisis and against a Palestinian bid for U.N. recognition of de facto statehood.

Israel announced plans on Friday to build 3,000 more settler homes just a day after the U.N. General Assembly upgraded the Palestinians' status in the world body from "observer entity" to "non-member state" over Israeli and U.S. objections.

"We have made clear to the Israeli government that such action is contrary to U.S. policy opposing unilateral action, including settlement activity and housing construction in East Jerusalem," White House spokesman Jay Carney told reporters.

"We urge Israeli leaders to reconsider these unilateral decisions and exercise restraint, as these actions are counterproductive and make it harder to resume direct negotiations to achieve a two-state solution," he said.

Netanyahu's pro-settler government ordered "preliminary zoning and planning work" for thousands of housing units in areas including the "E1" zone east of Jerusalem.

Such construction in the barren hills of E1 has never been put into motion in the face of opposition from the United States. Building in the area could bisect the West Bank, cut off Palestinians from Jerusalem and further dim their hopes for a contiguous state.

HISTORY OF STRAINED TIES

President Barack Obama has had a history of strained ties with Netanyahu that date back to the U.S. leader's failed efforts to secure a durable freeze on Israeli settlement activity early in his term.

Since then, the Obama administration has routinely criticized settlement construction announcements, but this time went further than usual in detailing its concerns and publicly asking Israel to reverse course.

Asked whether Israel would face any consequences if it went ahead with the settlement construction, Carney said, "I don't have anything additional to provide to you on that."

The U.S. response is expected to be tempered by recognition that Netanyahu may be taking a tough stand on settlements ahead of a January 22 Israeli national election, but that any actual building could take a long time to place in motion.

It was not immediately known whether Israel gave the United States advance notice of its settlement-building plan.

At the State Department, spokesman Mark Toner said the E1 plans were "especially damaging" to prospects for a resumption of long-stalled Israeli-Palestinian peace talks toward a two-state solution.

Such projects, on land Israel captured in a 1967 war, are considered illegal by most world powers and have routinely drawn condemnation from them. Approximately 500,000 Israelis and 2.5 million Palestinians live in the two areas.